About six years ago, Mary Barra was appointed CEO of General Motors, becoming the first woman to lead a major global automaker and raising hopes that the male-dominated industry was embarking on a new era of diversity in its executive ranks.
That hasn’t happened.
The auto industry, as a whole, remains a boys’ club in the upper echelons despite Barra’s success at GM, where she’s widely credited with boosting profits and beating many rivals on self-driving car technology.
Julie Hamp, an auto industry veteran who has worked in executive communication roles for GM and Toyota, said the industry hasn’t done enough to embrace women in leadership.
“It’s an industry that really needs to take the rationale of good business sense for having women at the top into consideration, and I just question if they do,” Hamp said. “It’s hugely important, and they need to really recognize this importance.”
Of the 11 major automakers that provided data to USA TODAY, none had women in more than 23% of their U.S. vice president-or-higher positions as of the end of the second quarter.
Two – Hyundai and Kia, which are part of the same parent company – had zero.
With the exception of GM, where six of 11 global board members are women, none had women in more than 35% of their board director positions. At a majority of the 11 automakers surveyed by USA TODAY – Fiat Chrysler, Nissan, Honda, Hyundai-Kia, Jaguar Land Rover and Toyota – more than 4 in 5 board members were men.
It’s a misstep of corporate leadership, according to research demonstrating that companies with women on boards and at the top ranks of their companies are more successful than businesses where men dominate.
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“All the research and the data shows that companies that have more diverse and inclusive organizations are more competitive and get better results,” said Lorraine Hariton, CEO of Catalyst, a nonprofit that advocates for women in the workplace.
Advocates for gender diversity say it’s simply the right thing to do – but also that companies are compromising their own earning power by failing to include more women on boards and in top leadership positions.
“That means that we are going to stop innovating and growing,” said Sheryl O’Loughlin, co-founder of the Justice Equity Diversity Inclusion (JEDI) Collaborative and former CEO of Clif Bar, who advocates for women in director roles. “We cannot empathize with our consumers and customers if we can’t walk in their shoes because we know nothing about their lives.”
Understanding the transportation priorities of women is crucial for the success of automakers, especially because women are extremely influential in the car-buying process. More than 60% of women are “the sole decision-maker when it comes to purchasing their next car,” and they tend to focus more on “practical” traits like cargo space, according to a recent Cars.com survey.
That suggests it’s in the best financial interests of automakers to promote women to the upper echelon. By virtue of their life experiences, they can identify opportunities and challenges that men fail to comprehend and can curtail overconfidence, according to research.
For example, car seats are typically designed to accommodate the body shape of men, especially in sports cars, said Rebecca Lindland, a longtime auto analyst and founder of consultancy RebeccaDrives.com.
“What is comfortable to a 5-foot-10-inch man is not necessarily comfortable for a 5-foot-10-inch woman and is certainly not going to be comfortable to a 5-foot woman,” said Lindland, who regularly reviews new cars.
Hariton, the Catalyst CEO, said it makes good business sense for the auto industry to recruit, cultivate and promote women.
“You need them because you need to attract and retain the best talent, it allows better decision making and we also know there’s a very diverse population that are buying cars and the organizations need to reflect their consumer base,” she said.
Auto industry vs. corporate America
Women face obstacles to promotion across the economy.
A recent report by consultancy McKinsey found that in corporate America, women represent only 21% of C-suite executives, 30% of VP-level executives and 38% of managers.
But the lack of opportunity for women is even more severe in the auto industry, where women make up only 13% of C-suite executives, 18% of VP-level executives and 20% of managers, according to Catalyst.
“The contrast for the automotive sector versus corporate America as a whole could not be more stark,” said Terry Barclay, CEO of Inforum. That Michigan-based women-in-the-workplace advocacy group recently published “The Road to the Top is Not on the Map: Conversations with Top Women of the Automotive Industry.”
Some companies are making progress.
GM is a notable exception with its majority-women board and multiple women in key roles. Not only is Barra the CEO, but in September 2018 she appointed Dhivya Suryadevara to serve as GM’s chief financial officer. In doing so, Suryadevara became the first woman in that job and could be in line to succeed Barra someday.
For decades, GM was run by white men – like Roger Smith, Jack Smith and Rick Wagoner – who presided over a series of failures that culminated in the company’s 2009 bankruptcy and federal bailout. Lacking diverse leadership, they failed to reinvent GM as it faced new competition from foreign automakers, crippling costs and staggering bureaucracy.
Since she took office, Barra has repeatedly sent signals that GM can’t afford to go back to the old ways of doing business.
“Ensuring a diverse and inclusive workplace is a critical business imperative, and we treat it that way,” Barra told USA TODAY in an emailed response to written questions.
“Diversity in all its dimensions creates a stronger workforce and promotes fresh, innovative thinking. When it comes to providing women with growth opportunities, we’re focused on cultivating a robust pipeline of talent.”
Barra said she asks for “a diverse slate” whenever she’s considering someone for a leadership role.
“If we find that a position has no diverse candidate, we make the necessary changes to ensure that in three years’ time, there will be a diverse slate. Alignment, commitment and a consistent approach are vital,” she said.
Supporters credit Barra for proving to chauvinists that women can do everything men can do – and often better – in an industry that cherishes vehicle specs many associate with masculinity, such as horsepower, torque and towing capacity. She has made several key calls that have boosted GM, including:
- Closing plants that built poorly performing cars, including the Lordstown, Ohio, assembly plant, which drew a hailstorm of bipartisan criticism.
- Killing multiple cars that outlived their usefulness, including the Chevrolet Volt and Chevrolet Impala.
- Positioning GM for the future with her acquisition of self-driving car firm Cruise Automation, which has ballooned into a huge asset most recently valued at $19 billion.
“They always accuse women of not being tough,” Autotrader analyst Michelle Krebs said. “She’s made some very tough decisions.”
Hamp, who is now serving as chairman of the automotive fleet manager Motus One, said the importance of Barra’s elevation cannot be underestimated.
“She was the first female CEO and is producing strong results, taking action to change the business model at a time when the auto industry is going through more change than it ever has,” said Hamp. “Young people coming up through the pipeline look at her as a role model and they say, ‘That can be me someday.’”
From a financial perspective, GM is as fit as it’s been in decades. The company has recorded its three most profitable years since bankruptcy under Barra’s tenure, including a $7.9-billion profit in 2018.
Still, Krebs said Barra’s promotion and success have not ushered in a new, enlightened era for the broader industry.
“It is disappointing that it hasn’t triggered more of a change,” she said.
Japanese, Korean automakers trail
The Japanese and Korean automakers are particularly far behind on gender diversity.
At Korean brands Hyundai and Kia, for example, there were no women in U.S. VP-or-higher roles as of the end of the second quarter.
Japanese automaker Toyota, which in May called itself “a leading company for diversity,” declined to provide its leadership figures for this story. It has women in charge of three manufacturing plants and in North American roles such as chief financial officer and chief human resources officer. But women make up only 13% of the company’s board.
At Japanese automotive brand Nissan, six of 27 top U.S. executives are women (22%). At Japanese automotive brand Subaru, it’s three of 21 (14%). At Honda, it’s six of 46 (13%).
The companies say they know they need to get better.
“Honda is committed to supporting the growth of diverse leadership for today and tomorrow,” Honda spokesman Jeffrey Smith said in an email. “This includes a focus on accelerating the advancement of women to senior leadership positions throughout the company.”
Industry leaders say that the Asian automotive brands have been particularly slow to promote women, in part, due to conservative cultures.
In Japan, fewer than 1 in 10 corporate managers are women. Japan Prime Minister Shinzo Abe has called for the cultivation of “a society in which women shine,” saying it’s important for the sake of equality and to help boost the Japanese economy.
“They have got to bring more women into the workforce, but they have a lot of cultural challenges,” Catalyst’s Hariton said. “Changing culture takes time.”
The issue may be particularly pressing for the Japanese and Korean brands in America because of the diverse customer base for popular vehicles like the Toyota Camry, Honda CR-V and Nissan Rogue.
“They produce vehicles that are heavily purchased by U.S. women,” said Autotrader’s Krebs. “That’s always struck me as ironic that they don’t have more women in the management ranks and leadership ranks.”
The automakers traditionally treated as “foreign” aren’t the only ones that need to become more inclusive, advocates say.
At Fiat Chrysler, which maintains the former Chrysler headquarters in Michigan even though it’s now based in Europe, only 17% of U.S. executives and 17% of board members are women.
Fiat Chrysler says it’s making progress.
Teresa Thiele, a business development executive at Fiat Chrysler, is a co-leader and developer of the company’s Women’s Leadership Experience program. She said the leadership program, formed in 2017, gives about 25 typically mid-level management employees an opportunity to meet with career coaches, work on their personal brands and complete leadership training each year. Of the 2018 class, 31% had already been promoted as of this summer, she said.
“There’s a lot of amazing talent within the company that has the ability to drive those decisions and be change agents,” she said.
Pressing for change
Ensuring that recent female hires get promotions is key to their long-term success in the workplace, advocates say.
That’s because for every 100 men promoted into their first management position across the economy, only 72 women are promoted, according to the McKinsey study. That disparity carries through into the executive ranks years later.
“That’s the sobering news,” Barclay said.
Still, she contended that automakers are making strides with mentoring programs, recruiting initiatives and internal training.
“The industry is becoming more flexible, more creative, more understanding about how they need to transform in order to attract and retain more talent,” she said.
The problem is that many young women don’t envision the auto industry as a place of opportunity for them, she said. To change that perception, female college students, teenagers and kids must see that there’s ample opportunity for women.
“Seeing is believing,” said Fiat Chrysler’s Thiele. “The more exposure younger girls get to the fact that there is somebody there that is in a role that they aspire to be in … gives them confidence to go and pursue something in that direction.”
Catalyst’s Hariton said the industry must go beyond a commitment to mentorship and commit to “sponsorship.”
“What really moves careers ahead are sponsors,” she said. “Those are people who are talking about you in positive ways when you’re not in the room as opposed to in the room.”
Catalyst works with companies to cultivate programs that match younger women to older sponsors who can help promote their careers. The sponsors can and often should be men, Hariton said.
Hamp, the former GM and Toyota executive, said women should also seek out sponsors on their own. She recalled that at one of her former companies, she “asked around” after joining to find out “who is the person with the biggest influence” with whom she could develop a professional relationship.
“I asked for his support” directly, she said. “Basically I said, ‘I’m new here, I have not had a long career in this company, I know that there’s a lot of men in these various roles I’ll be working with, and I just want you to know that women can feel left out of that club. And all I’m asking is that you support me when I’m not in the room.’”
Ultimately, advocates say, automakers should pursue diversity because it’s the right thing to do. But from a practical perspective, they’ll also benefit because customers increasingly tie their purchase decisions to corporate values.
“We are thinking more about the products we buy and the companies we buy them from,” Krebs said, “and are they companies that reflect our values?”
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.